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Valued Contributor
red259
Posts: 1,694
Registered: ‎06-05-2013
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New accounts impact on credit score

How long do new tradelines have a negative impact on your CR for?


Starting Score: EQ: 714, TU 684
Current Score: EQ: 725 7/30/13, TU 684 6/2013, Exp 730 6/27/14
Goal Score: 800 In garden until 1/2015
Mega Contributor
LS2982
Posts: 15,434
Registered: ‎04-09-2011
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Re: New accounts impact on credit score


red259 wrote:

How long do new tradelines have a negative impact on your CR for?


I would say 6 months to a year. 




Silver Spade Garden Club Member - Last App 12/16/13 - Looking for a clean slate NO INQ's / Diamond Inspired!
Starting Score:
EX (PLUS) 583 EQ FICO 565 TU FICO 590 3/15/2011 / Goal Scores: 720
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09Lexie
Posts: 24,939
Registered: ‎09-13-2012
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Re: New accounts impact on credit score

LS is correct. Though depending on the thickness of your file and how many new accounts the time period can be less.
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Ailee92
Posts: 97
Registered: ‎06-09-2013
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Re: New accounts impact on credit score

Even with my thin file it's still very little damage. I was hurt a few points by getting 4 new cards few months ago, then when the new limits reported it brought my debt ratio down. about 7% to 3% and my score actually went up 3 points. Many people are afraid their scores will drop, but unless your right along the border of a score bracket and planning to make a big purchase through a loan in the next 6 months or so I wouldn't even sweat it.

Senior Contributor
longtimelurker
Posts: 5,978
Registered: ‎04-22-2013
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Re: New accounts impact on credit score

[ Edited ]

09Lexie wrote:
LS is correct. Though depending on the thickness of your file and how many new accounts the time period can be less.

Slightly different from Inqs, which absolutely have no Fico score impact after 12 months.   So another answer is that new accounts impact indefintely via reducing AAoA, but as Lexie implies, the impact can be very small if you have lots of accounts, and quite large and last a while if the new account is only your second one or if you have several new accounts.

Most active cards: Amex BC ($50K), Cap One QS ($33K) Fidelity Amex ($20K)
Others: CSP, Freedom, Chase Amazon, Cap One QS, Penfed Plat Rewards (x2), Citi TY Preferred, Citi Dividend, Citi AA Plat Select, Citi Forward, Amex BCE, Amalgamated Bank, Sallie Mae, Cash Plus
Scores May 14: EQ 848, EX 833, TU 841 (Jul)
Super Contributor
enharu
Posts: 6,889
Registered: ‎02-27-2013
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Re: New accounts impact on credit score

+1 to what others said.

 

New accounts also have an impact outside of your score. Several lenders are very sensitive to new accounts being reported, and will deny applications even if your scores are really high. 

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Senior Contributor
longtimelurker
Posts: 5,978
Registered: ‎04-22-2013
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Re: New accounts impact on credit score


Ailee92 wrote:

Even with my thin file it's still very little damage. I was hurt a few points by getting 4 new cards few months ago, then when the new limits reported it brought my debt ratio down. about 7% to 3% and my score actually went up 3 points. Many people are afraid their scores will drop, but unless your right along the border of a score bracket and planning to make a big purchase through a loan in the next 6 months or so I wouldn't even sweat it.


It also depends on the existing AAoA of the account.   So if all your accounts are fairly new, adding some more, bringing AAoA from 1 year to 8 months say, might not have a huge impact, and depending on utilization, your score could even go up.

 

But if you have 5 cards each 5 years old, and you add another five new ones, the AAoA going from 5 to 2.5 probably would cause a noticeable decrease.   (And if you have lots of very old cards, adding new ones doesn't move AAoA much at all...)

Most active cards: Amex BC ($50K), Cap One QS ($33K) Fidelity Amex ($20K)
Others: CSP, Freedom, Chase Amazon, Cap One QS, Penfed Plat Rewards (x2), Citi TY Preferred, Citi Dividend, Citi AA Plat Select, Citi Forward, Amex BCE, Amalgamated Bank, Sallie Mae, Cash Plus
Scores May 14: EQ 848, EX 833, TU 841 (Jul)

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